Fading expectations for Samsung Electronics shareholder returns and derailed Czech nuclear talks drag KOSPI down 1.24%
KOSDAQ drops 2.34% amid selective rallies in new LED technologies and biotech shares
South Korean equities closed lower across both the KOSPI and KOSDAQ markets on Tuesday. Despite the U.S. Federal Reserve's decision to hold benchmark interest rates steady and a strong Wall Street performance, local markets faced mounting selling pressure. This came as enthusiasm waned over major domestic corporations' shareholder return policies alongside concerns over lackluster earnings at select firms. Heavy institutional selling, particularly concentrated in the electrical and electronics sectors, pushed the KOSPI below the 6,000 mark a day after reclaiming it.
According to the Korea Exchange, the benchmark KOSPI finished down 74.78 points, or 1.24%, at 5,937.66. The tech-heavy KOSDAQ fell 18.05 points, or 2.34%, to close at 753.23. In the currency market, the won-dollar exchange rate ended weekly trading down 0.9 won at 1,336.8 won per dollar.
The KOSPI opened lower despite the Fed's rate freeze overnight and robust U.S. equities. Investor sentiment was dented by a reduction in expectations regarding Samsung Electronics' additional shareholder return plans and weak earnings reports from major U.S. corporations, prompting institutions to expand their sell-off, particularly in electrical and electronics issues.
By sector, construction dropped 5.7%, machinery and equipment fell 5.3%, entertainment and culture lost 3.6%, and chemicals retreated 3.0%. Large-cap stocks declined 1.3%, medium-caps shed 0.9%, and small-caps fell 1.0%.
In the supply-demand breakdown, institutional investors net-sold 446.5 billion won, while foreign and retail investors net-bought 68.1 billion won and 33.4 billion won, respectively. Foreigners targeted electrical and electronics (907 billion won), transportation equipment and parts (584 billion won), and metals (422 billion won).
The KOSDAQ declined for the first time in three sessions amid growing caution ahead of major U.S. corporate earnings releases, accompanied by joint net selling from foreign and institutional investors. By sector, transportation equipment and parts and machinery and equipment each fell 3.4%, while medical and precision equipment lost 3.1%. Foreigners and institutions net-sold 130.6 billion won and 75.4 billion won, respectively, while retail investors net-bought 216.6 billion won.
Individual Stocks Surge on New LED Tech and Strong Earnings
Seoul Semiconductor (046890) skyrocketed 29.93% on news of its development of ultra-small light-emitting diode (LED) technology that produces white light without rare-earth elements. Its subsidiary Seoul Viosys (092190) also surged 30.00%, hitting the daily upper limit.
Hanwha Vision (489790) jumped 22.14% following robust third-quarter earnings. On a consolidated basis, revenue rose 35.6% year-on-year to 573.4 billion won, while operating profit surged 183.3% to 102.6 billion won.
Rokit Healthcare (376900) climbed 21.79% on reports that it applied to expand indications for its artificial intelligence (AI)-based cartilage regeneration platform under European medical device regulations (CE MDR).
Hanmi Pharmaceutical (128940) gained 5.14% on news that domestic prescriptions for the homegrown obesity treatment 'Epe' have commenced.
T&E Korea (0053F0), newly debuted on the KOSDAQ market today, closed 40.52% higher than its initial public offering price of 15,300 won.
Related Shares Rally on Public Tender Offers and Mergers
KINX (093320) advanced 13.28%, extending the previous day's gains following news of an agreement on public tender offer terms with Macquarie. Kolma B&H (200130) rose 7.26% on its decision to absorb its 100% subsidiary HNG.
Bitsream Electronics (072950) climbed 2.56% as expectations persisted for expanded optical communication infrastructure investments driven by the proliferation of AI data centers.
Conversely, Daewoo Engineering & Construction (047040) plunged 18.57% and Doosan Enerbility (034020) tumbled 7.65% after negotiations for the construction contract of the Czech Dukovans nuclear power plant fell through. Korea Hydro & Nuclear Power terminated talks with the Daewoo E&C-Doosan Enerbility consortium after failing to narrow differences on key terms.
Samsung Electronics (005930) dropped 4.13% as market expectations cooled after the company announced it would detail the execution plan for its remaining shareholder return financial resources and its next shareholder return policy in late January next year.
LG Energy Solution (373220) sank 8.60% on concerns over a potential supply overhang after its largest shareholder, LG Chem, decided to dispose of approximately 2.5 trillion won worth of its holdings.
Samsung SDS (018260) retreated 7.19%; although its third-quarter revenue and operating profit increased year-on-year, its operating profit margin slipped from 6.8% to 6.4%.
HD Hyundai Heavy Industries (329180) fell 4.73% as third-quarter operating profit missed market consensus, compounding worries over intensifying order competition stemming from the expansion of Chinese shipbuilders' production capacity.
